dispatches from the new world of work

It's Obvious! Not!

Perversely, it's sometimes (very, very) obvious. Unless: (1) You are very close to the action. (2) You are very smart-clever.

I had a long-ish talk with a petroleum company executive in California. He's very experienced! Very savvy! Brilliant!

And: He was perfectly able to explain the appropriateness of oil-company profits last quarter. ($9 BILLION at ExxonMobil alone, recall.)

And he was irate (understatement) at my highly intellectual rejoinder, "It sucks. It's an insult, an outrage to 98% of your adult fellow Americans—including me. We go to Iraq over oil, we suffer an ungodly deadly hurricane ... and you get a humongous bonus for being in the right place at the right time. At least be contrite, for God's sake."

(End of conversation.)

We are not likely to conserve our way out of slavery to the Middle East. I do not favor a windfall profits tax. I want, in fact, sky-high energy prices to spur hydrocarbon discovery, refinery construction, conservation, and alternative energy-source development.

But I want my friend ... at this moment in time ... simply ... to feel my/our pain. Not to give me an intellectually brilliant argument along the lines of, "Some years are good, some years are bad." ("Screw you!")

In 1973-74 I worked on drug control issues in, yes, the Nixon White House. My office, #424 Old Executive Office Building, was about 75 yards from the fabled West Wing and, moreover, I had a coveted pass to the Senior White House Mess. (I got to sit near the likes of Chuck Colson ... before he went to jail.) All of America knew RMN was about to be ridden out of town on a rail ... or on a Big Jet Plane. That is, all of America knew it except, it seemed, a few hundred of us "best and brightest" who lived in the immediate vicinity (measured in yards) of Mr I-Am-Not-A-Crook.

My cohorts and I didn't know Nixon had a half-life measured in hours. Mr Oil didn't know we-the-people were unimpressed by a Gaggle of Old White Guys on Capitol Hill telling us $9,000,000,000+ in profits was no more than fair pay for 90 days' work.

There is legal "inside information" of incredible value. No doubt of it. But there is also inside insularity that does incredible harm to enterprises. And, perversely in my experience, the higher up they are and the smarter they are (smart = excellent at intellectually stunning rationalizations), the more likely they are to be dangerously out of touch with everyman.

Beware. If it walks like a duck, if it quacks like a duck ...

Tom Peters posted this on 12/02/05.

Comments

Good story Tom - Tell the guy that while you talked to him for two minutes (or less) a few hundred kids died in Africa. Ask him to send some of their profits there. Tell him to be proud, not of how much they made, but on what they did for humanity as a result.

Posted by Trevor Gay at December 2, 2005 8:09 AM

I don't blame him for being irate. Tom, I deeply respect your opinions on improving (radically) how to do business but you miss the boat on this issue. Oil prices are dictated by supply and demand not the whims of executives. Supply disruptions combined with increasing worldwide demand led to higher prices. That's a law of economics and no amount of outrage can change that. I don't understand the problem you have with getting a humongous bonus for being in the right place at the right time. Isn't that a critical part of being successful? It's not like the oil companies are some fly-by-night operation selling snake oil. They've been around for a century building infrastructure, exploring, researching, etc. Some years are lean; some are bountiful. The market is working as it's supposed too. As far as being contrite, I expect that oil executive to blast you and every politician that accuses them of price gouging or making "excessive" profits. If 98% of Americans are outraged then 98% of Americans don't understand basic economics.

This oil executive is being hounded by politicians and accused being a greedy bastard by every consumer "advocate" in the country. I expect him to fight back. I'll accept that better ways of fighting back may exist, but he shouldn't just sit back and take it. I don't think any company should ever apologize for making a profit. That's what they're supposed to do. Apologizing would just encourage politicians to implement price controls that would hurt consumers.

Posted by Steve Sutton at December 2, 2005 10:32 AM

I spent over 25 years as a retail "partner" to large oil companies. Your comments, Steve, show why we in the US accept the greed from big oil. They have so much power and experience at PR that most citizens buy into their bs. Try reading The Prize by Daniel Yergin. If you do that with an open mind I think you may rethink some of your beliefs about the industry. In a democracy should there be no possible limit on profit? Is the "free" enterprise system subject to no external control? When I met Tom in the 1980"s he was trying to get through to some in the oil industry. Tom's lessons were an inspiration to me. Unfortunately I, like many of my retail peers, finally gave up.

Posted by Doug Kerseg at December 2, 2005 12:33 PM

When you sell your house and realize a profit--windfall or not--isn't that profit only a transitory thing? You have to buy another house, right, and more likely than not it'll be more expensive than the one you sold.

Are we to believe that oil companies have no expenses to which they have to apply their profits? R&D, drilling, refining, et. al., cost a bunch of money, especially given environmental restrictions. So I look at oil companies' profits--windfall, or "right place at the right time" though they may be--as a transitory budgetary surplus, and the means by which we can continue to live the lifestyles we've grown to expect through our dependence upon oil.

Posted by Chuck at December 2, 2005 2:25 PM

If it walks like a duck, and quacks like a duck, it might not actually be a duck, but it certainly thinks its a duck. Which can really piss of the real ducks.

Oil executives are not at all like real people.

Posted by John at December 3, 2005 12:14 AM

C'mon, Tom. What's to be pissed off about? Record profits are what are needed to work on alternative energy . . . Now the question remains as to whether or not the incentives favor that investment (something I hope for, but doubt).

C'mon, Tom II. You really believe we went into Iraq over oil? If that were true, wouldn't oil prices have gone down during this period? And, I haven't done the math, but HOLY CHRIST, TP, that would be SOME *&^%$ing EXPENSIVE OIL (somebody tell me how much oil we could have bought for what we have wrapped up in this mess).

Posted by S. Anthony Iannarino at December 3, 2005 8:47 AM

John, curious idea about the ducks, sorry, the not real ducks, wasn't it?... Oh, but oil executives are not real neither, hmnn, what are they, are they even in this planet? LOL

Re. youth and ignorance it could be dangerous, but having been also TP a confessed one, it's clear there is wisdom for our future. A bit of calm, the change to come re. oil is unavoidable anyway.

Posted by Omara at December 3, 2005 3:57 PM